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6. There is a 60% chance that a building on a plot of land will have NOI of 175,000 and a 40% chance it will

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6. There is a 60% chance that a building on a plot of land will have NOI of 175,000 and a 40% chance it will be 125,000. Construction will cost 1.15M. You will wait one year before constructing (for simplification assume construction takes one day to complete). Therefore, the NOI will be received through year 2 (assume at the end of year). What is the value of the real option if your cost of capital is 14% and the growth rate is 2%

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